TaxTMI 
TaxTMI 
2020 (1) TMI 1001
X X X X Extracts X X X X
X X X X Extracts X X X X
....her contends that the town Doraha is not notified as being in the vicinity of urban area Doraha and therefore the land is situated outside its municipal limits and is not a capital asset. The said land was compulsorily acquired by the Government and the Petitioner received compensation amount of Rs. 1,66,37,460/- and 20% tax amounting to Rs. 33,24,100/- was deducted at source pertaining to AY 2012-13 under Section 194 LA of the Act. Petitioner claims that the amount received is not taxable since the land acquired was "agricultural land" and the compensation received is exempted under Section 10 (37) of the Act. In order to seek refund, the Petitioner filed a belated refund claim under Section 19 (2) (b) of the Act of Rs. 33,24,100/-, contending that the TDS certificate in Form 16 A was not received on time and therefore the return could not be filed earlier and accordingly requested that the delay in claiming the refund be condoned. On 28.06.2018, the Office of the Chief Commissioner of Income Tax (Exemptions), Delhi called upon the Petitioner to submit details in support of correctness and genuineness of the claim of refund along with supporting documents/evidence. In response the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etitioner has relied upon Section 2 (14) (iii) and contended that Doraha town in Punjab has not been notified in the list of towns-in notification No. 9447 dated 06.01.1994, as amended by notification No. 11186 dated 28.12.1999, and therefore the compulsory acquisition of the land could not be considered as a capital asset, and therefore, the Petitioner was entitled to the benefit of the exemption. It was further argued that vide verification dated 12.09.2018, the SDM, Payal, Ludhiana has confirmed, that the land acquired for construction of national highway was agricultural land since two years prior to the date of acquisition. On strength of this certificate, it is claimed that the land in question is agricultural land. Additionally, the learned counsel for the Petitioner also relied upon the report dated 29.01.2019, issued by the Halqa Patwari, Tehsil Payal, District - Ludhiana, Punjab, to contend that the land acquired falls outside the municipal limits of Municipal Council, Doraha. 6. Ms. Adeeba Mujahid, learned senior standing counsel for the Respondent on the other hand, argued that the Petitioner is not entitled to claim exemption on income earned from agricultural land,....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and request for approval of belated refund claim was made to Principal CIT-II, Ludhiana. During the processing of the file, the office of the Principal CITII, Ludhiana noticed that since the assessee society was registered under Section 12A and 12AA, the jurisdiction over belated refund claim vested with ITO (E), Jalandhar and the relevant documents and PAN of the society were orderred to be transferred to exemption ward, Jalandhar by Principal CIT-II, Ludhiana vide letter dated 26.04.2017 and the same came before ITO (E), Jalandhar. A report was called for from CIT (E), Chandigarh, who vide letter dated 17.05.2018, observed as under: "....the assessee field an application u/s 119(2) (b) of the I T Act for condonation of delay alongwith filing of return for the A.Y. 2012-13 filed in ITR-5 under the status of AOP claiming a refund of Rs. 33,24,100/- in respect of TDS u/s 194LA @20% on the amount of Rs. 1,66,37,460/- received on agricultural land acquired by Government. The assessee is registered u/s 12AA of the Act vide this office order No. 2869 dated 29.07.2016 applicable from A.Y. 2016-17 and onwards. The SDM, Payal, Ludhiana furnished Form-16 for TDS at Rs. 33,27,492/-....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under: "(i) Agricultural land vide Khasra No. 1243 hadbast No. 248 of village Arraichan owned by the Gurudwara Sahib Patti Dhaliwal, acquired by Competent Authority cum-Sub-Divisional Magistrate, Payal, Distt. Ludhiana. (ii) The said Kharsa No. 1243 of Hadbast No. 248 of Village Arraichan was situated outside the Municipal Limit of Municipal Council, Doraha, Tehsil Payal, Distt Ludhiana, hence, not capital asset. (iii) Though, the exemption u/s 10 (37) is not available to the Trust but it is certainly not taxable, agricultural land being situated outside the Muncipal Limit of Doraha as per certificate referred above." 12. Since the Petitioner has conceded that exemption under Section 10 (37) is not available to them, the only question that survives for our consideration is whether the land in question is a capital asset. If the land is not agricultural land, it falls within the meaning of "capital assets" as per Section 2 (14) (a) of the Act and would attract capital gains on the income derived from such asset. It would thus be appropriate to refer to the aforesaid provision which is extracted hereinbelow: "(14) "capital asset" means- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.-For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year; (iv) 6½ per cent Gold Bonds, 1977, or 7 per cent Gold Bonds, 1980, or National Defence Gold Bonds, 1980, issued by the Central Government; (v) Special Bearer Bonds, 1991, issued by the Central Government ; (vi) Gold Deposit Bonds issued under the Gold Deposit Scheme, 1999 or deposit certificates issued under the Gold Monetisation Scheme, 2015 notified by the Central Government. Explanation.-For the removal of doubts, it is hereby clarified that "property" includes and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty, municipal corporation, notified area committee, town area committee, town committee, or by any other name or a cantonment board and which has a population of not less than ten thousand) and which has population of more than one lakh but not exceeding 10 lakh. The report received by the Respondent states that khasra No. 1243 is outside the municipal limit, but is situated within 1 Km from the local limits of municipality of Doraha Town and has a population of more than 25,000 as per 2011 census. Thus, according to this report, the land in question cannot be considered to be agricultural land. Petitioner has not been able to furnish any documentary evidence to contradict the aforesaid report. Further, when a report was called from CIT (E), Chandigarh vide letter dated 13.08.2018 on assessee's application dated 16.08.2018, CIT (E) Chandigarh vide letter dated 07.12.2018 forwarded his comments and inter alia on the question of the land being agricultural or not stated as follows: "c. On perusal of the report submitted by the AO through his Range Head, it was revealed that the documents i.e. copy of the Notification of Gazette of India, Extraordinary in support of its versi....